Emoyment law

[Marta]

Can someone explain this clause to me?
I understand this is non-compete restrictive covenant and it my be drafted too widely hence unenforceable ( unless blue pencil rule will be applied), but I don't get that bit with the shares..
Pls help!

you will not indirectly or directly for a period of 12 months from the Termination Date, be engaged, interested or concerned whether as principal, agent, representative, partner, director, employee, joint venturer, investor, consultant or otherwise in any Competing Business, except that you may hold up to 5% of any class of securities of any company listed on a recognised investment exchange;

[Kati]

Re: Emoyment law

Hi [MENTION=67567]Marta[/MENTION], welcome to LB ... I've moved your post to the employment section so the right Beagles spot it
I'm sure [MENTION=19071]teaboy2[/MENTION] and [MENTION=48758]stevemLS[/MENTION] will have some good advice for you.

K xx

[Marta]

Re: Emoyment law

Thank you Kati, I really aprreciate it

[teaboy2]

Re: Emoyment law

deffo unenforceable if there is no geo-location limit i.e a radius of x miles or limited to a town, area, district etc.

The shares thing means your allowed to buy invest in a competing business that is listed on stock exchange etc, but limited to a maximum of 5% value of total company shares, though that be unenforceable anyway, as they can not limit what you invest your own money in when your not even involved in the day to day running of the company you invested in!

[happylife]

Re: Emoyment law

Lots of companies have this. Unless the competition is locally geographically and you are taking their own clients away I don't think there is a lot they can do. Human rights and all that.

I know some companies who pay off their employees a nice handshake settlement with a signed contract listing those firms specifically. This is different.

I would be interested to know any person taken to court over this vauge inclusion which is just scare tactics. IMO

The shares are a strange one ! Never seen this before.

Your money is your own and you should be able to spend as you wish.

[FlamingParrot]

Re: Emoyment law

deffo unenforceable if there is no geo-location limit i.e a radius of x miles or limited to a town, area, district etc.

The shares thing means your allowed to buy invest in a competing business that is listed on stock exchange etc, but limited to a maximum of 12 shares, though that be unenforceable anyway, as they can not limit what you invest your own money in when your not even involved in the day to day running of the company you invested in!

I don't see anything that mentions 12 shares, it says 5% "of any class of securities". That could be any number of shares depending on how the shares are issued.

It sounds like they just made that one up without even thinking about what it says, leaving to one side the fact that you can invest your money wherever you wish, if you invest in a company "listed on a recognised investment exchange", there would be no way of knowing what you've invested in. Presumably a recognised exchange means the London Stock Exchange or the one based in NY, Frankfurt, etc. or a unit trust, ISA, fund, etc. The records of who owns shares in publicly listed companies floated in stock exchanges or who has invested in a certain unit trust or fund are not public or made available to anyone (other than for the purpose of criminal investigations into fraud or money laundering).

[Marta]

Re: Emoyment law

Thank you guys

[stevemLS]

Re: Emoyment law

I was a bit puzzled about 12 shares?

What type of industry are we talking about?

These type of clauses are always very fact specific, essentially they are only enforceable if they protect the legitimate commercial interests of you ex-employer - the cannot operate so as to deny your abiliity to earn a living.

[teaboy2]

Re: Emoyment law

12 shares was a meant to be 5% of company shares - Slight error on my part thats all guys.

[Kati]

Re: Emoyment law

12 shares was a meant to be 5% of company shares - Slight error on my part thats all guys.

I've got to admit, I skimmed through the OPs post to start with and read 12 'shares' instead of 12 'months'

[teaboy2]

Re: Emoyment law

I've got to admit, I skimmed through the OPs post to start with and read 12 'shares' instead of 12 'months'

Yep its a bugger when that happens lol